In a bid to offset their shrinking control over commissions and fees, hotels are working harder than ever to draw customers away from booking sites like Expedia, Orbitz and Priceline.
Although these sites once held an uneasy truce with hotel chains across America, Expedia’s recent acquisition binge threatens to create a third-party market with no room for negotiations.
Expedia Acquires the Competition
Expedia picked up Travelocity in January for a cool $280 million, after buying up a popular Australian travel site, Wotif.com, last year. Since then, it has set their sites on Orbitz and a $1.3 billion merger is currently in the works. This new takeover would give Expedia control of about 75 percent of the American third-party online hotel booking market. Hotels and consumer advocates alike are up in arms against the merger.
The advocacy group Consumer Watchdog filed a complaint with the Justice Department on August 10 in hopes of spurring an antitrust hearing, following the letters of several concerned hotel chains. Expedia argues that they are far from creating a monopoly, since there are plenty of other sites left that will give customers room information and help them book trips, such as Google Hotel Finder and TripAdvisor, as well as the hotels’ own sites.
Hotels Are Fighting Back with Perks
Besides filing complaints with the Justice Department, hotel chains are fighting back against the potential merger in the only way they can: by offering big perks. Because government regulators and existing contracts with these online booking sites generally bar hotels from reducing their prices for customers who skip the middleman, hotels are instead working to improve the experience of lodgers who come direct.
Reward programs are gaining steam, but digital check-ins and direct-booking that allows guests to choose their own room are really on fire. Digital check-in gives customers the option to skip the lines at the front desk and head directly to their room from the lobby. Hotel-specific apps can also provide direct booking guests with a map of available rooms so they can have their pick instead of being randomly assigned to whatever room is next on the list.
Whether the Expedia-Orbitz deal will be allowed to go through remains to be seen, but in any case, the increased attention that hotels are now paying to guests may prove to be worth more than the convenience of third-party booking sites. Expedia’s huge share of the market would become suddenly worthless if hotels can successfully attract brand-loyal visitors.